Grantmaking Foundations

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 11,600 grantmaking foundations in the US award grants from trust funds to support charitable activities. Top areas of focus for giving include healthcare, education, human services, public affairs, arts and culture, environmental causes and animals, and international affairs.

Market Risk Challenges Investments

Fluctuations in interest rates, corporate earnings, and global financial markets can create a challenging investment environment for foundations.

Facing Public Scrutiny

Grantmaking foundations, particularly public foundations, face scrutiny from the public to provide transparency.

Industry size & Structure

The average grantmaking foundation operates out of a single location, employs about nine workers, and generates $7 million annually.

    • According to the US government, the grantmaking foundation industry consists of about 11,600 firms that employ 104,800 workers and generates $86 billion in revenue.
    • The 238 US foundations surveyed in 2019 received over $9.4 billion in gifts, distributed nearly $8.4 billion to organizations and individuals, and managed over $94.1 billion in assets, according to Candid and the Columbus Survey.
    • The top 50 organizations account for about 38% of industry revenue.
    • Large organizations include the Bill and Melinda Gates Foundation, the Ford Foundation, and the Silicon Valley Community Foundation (SVCF).
    • Most foundations have less than $50 million in assets.
                                  Industry Forecast
                                  Grantmaking Foundations Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 2, 2023 - Disaster Philanthropy Is Transitioning
                                  • Grantmaking foundations are changing how they respond to disasters by supporting education about preparedness and building resilience and local leadership in communities likely to face greater hardships from disasters, according to The Dorothy A. Johnson Center for Philanthropy. “Key actors — like the Center for Disaster Philanthropy and many community foundations — are helping to drive the understanding that emergency response alone is unequal to the threat posed by recurring disasters,” the Center's "11 Trends in Philanthropy for 2023” report states. Disaster philanthropy in the wake of both Hurricane Katrina and the 9/11 attacks tended to be present-oriented despite reminders that resources would also be needed for long-term recovery and rebuilding, the report notes.
                                  • Foundation investments performed poorly in 2022 after three straight years of gains, according to Foundation Mark, a firm that provides trustees with comparative financial reports on their foundation. The poor performance resulted in a 19% decrease in the value of endowments. The losses, which include grants and operating expenses foundations made last year, suggest that foundations will have a difficult time maintaining their grant-making levels unless they dig into their endowments, according to The Chronicle of Philanthropy.
                                  • Four of the top five US environmental grantmakers are Americans who rank among the 30 wealthiest people in the world, according to Forbes. About two-thirds of the listed grantmaking operations are funded by billionaires. Several of the institutions on Forbes' list did not exist a few years ago: Bezos Earth Fund, Yield Giving, and Sequoia Climate Foundation. The climate fund of Amazon founder and former world’s richest man Jeff Bezos was the largest environmental funder in the US during 2021. Others, like the Chan Zuckerberg Initiative, made their first climate grants in 2021.
                                  • Simplifying the grantmaking process shortened the overall timeline for approving grants, provided more flexibility on reporting, and temporarily shifted the responsibility of completing grant applications from grantees to grantmaking organization staff, according to an analysis of the Walton Family Foundation's Covid Relief Fund. The desire to move quickly meant that some needs which arose later in the pandemic were missed, however. Future programs will attempt to balance immediate needs against emerging needs as circumstances evolve. The Fund also worked primarily with existing foundation grantees. The analysis found that an opportunity for grantmaking to be even more diverse and inclusive was missed as a result of the focus on grantees with whom the Foundation had well-established relationships.
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